RECESSION SHOWS WITHDRAWAL SYNDROME

Lot more happened. Banks collapsed. Crores of money of investors steamed. Currencies witnessed huge set backs. Job losses hit the record height. Techies felt the heat of being poor. Countries started thinking of protecting their citizens alone. Economically a country had been vanished. Recession has many more in its credit. After the recession in the early 30s this is the worst one. Some blame it on the developed world while others blame US for the crisis. Who is responsible is a question down the ladder. The question was how we can overcome the recession. Almost all the governments around the world announced stimulus packages for the economies. In reality lots of crores of money had been deployed to bring the economies back on track. America was the master in it. The recession baby president of the US Mr Barrack Obama lead the state through difficult times. Now one thing is sure that we are not hearing any news regarding bank closure from America. Is it symbolizes that the recession fear is out of the door? We can’t believe it until we get more proof in this regard.

Indian stock Market
The worst situation in Indian stock markets raised in 2008, October. The sub prime crisis in the US was the main culprit behind that. Markets plunged and stocks witnessed huge sell off. As a result indices came down FIIs started to sell their holdings. They sold indian rupee and bought back dollar. Consequently Indian currency became cheaper. This same situation continued throughout the year. When headed towards the end of 2008 some activity in stocks had happened. Some kind of buying interest emerged out of despair and slowly it stretched its roots around. Indian stock market welcomed the new year with a positive note. But then came the satyam saga, the largest ever stock market scam in the history of Indian economy. The inflated figures by the satyam promoter came as a shock for the entire India incorporated. When the dust settled down over the satyam scam the recession fears across the globe started easing. And as a result from march 2009 onwards again some buying interest witnessed in the market.
55 percent from the lows in Oct-Nov 2008 have been regained from the stock market. This is mainly due to the buying interest showed by the retail investors. The inflation fears gave way to deflation figures in India this was a positive as well as negative sign for the country as a whole. Some drastic change had been taken place after the announcement general election schedule. Markets witnessed volatility and some sort of profit booking had been taken place. But on 15th May, the before counting of votes Indian stock market surged. There was a clear indication that market will go down after the results if any uncertainty arises but unexpected happened....

Post result scenario
It was never predicted by any analysts. Neither it was screened by the exit poll cameras. But it happened. The thing which happens in a century in any stock market happened in Indian stock market. Indian stock indices surged 20 percent in one day. On may 18th the Bombay sensitive index or sensex surged 2111 points in a single day. This was the greatest in the history of Bombay stock exchange. Trading has taken place only below 2 minutes and halted for the whole day due to aggressive buying. This was the clear indication that UPA government’s policy will be in favor of markets. Market believes that the disinvestment policy will get a clear green signal. UPA is going to take the reins of the country without the support of the left parties. That also gave some sort of relief to market men.
Predictions are touching the skies now. Some predicts that Sensex will break the last record of 21,000 thousand and then it will headed toward 35,000 mark. Some predicts even higher figures. The two days after golden monday were not very bright. Huge volatility witnessed on tuesday and on wednesday indices closed in red. Huge profit booking is taking place in the market. But analysts calculate this will not last long and market will surge with in no time.

Issues and possibilities
UPA came into power as a result of the verdict in favour of a stable government. They should realize that this is not a blind verdict. UPA is getting long 5 years to lead the country once again. Left parties have been marginalized by the people across the country. But it is not because their policies were wrong. It is because the people needed a stable government.
Insurance and aviation bills are up in the sleeves of the UPA government. They can take it out at any time. Disinvestment and privatization are the other two main areas of Interest. It is a fact that during the regime of congress government some quick changes in the political scenario of the country taken place. Dr Man Mohan Singh was the main architect of these reforms. During the last tenure of the UPA government the country’s growth rate witnessed an immediate jump- from the 5plus figure of the NDA time to 9percent during UPA regime.
Atomic energy agreement with the US was another mile stone of their rule. But the left parties left the union and protested against it. The proposed hike in FDI in the insurance sector was another area where the left had disagreement. Another was with the pension fund dissolving. These things didn’t happen only because of the protest of the left parties. Now UPA have the numbers which can defeat a no confidence motion. If they move blindly in order to satisfy the corporate that will prove wrong in the long term. But they have to look after the country’s growth rate also.
Indian rupee regained it’s strength in three days after the election results. This is a clear sign which indicates that FIIs are way back in their road to Indian capital market. History says sensex reached 14,000 mark due to the buying interest of the indian retail investors. After that the gain of 7000 points were made by the FIIs. If this happens again then market will surge. But government will have to look after the problems of the common man also. As recession shows withdrawal syndrome there are many green signals ahead for the Indian economy.